Increasing Order Fulfilment of Spare Parts in WIS and AS/RS Warehouse in PT. KTK Using Operational Excellence to Enhance Competitive Advantages

: The research is focused on the inventory storing process and used both generic and thematic framework to gain a better understanding from both perspective between business environment and the operational environment that currently occurred in PT. KTK. Competitor analysis, 7Ps marketing mix, and SWOT analysis are used to gain an understanding of the internal and external situation of PT. KTK and to compare PT. KTK with its competitors. On the operational sides, operational excellence is used to gain a better understanding and formulate a potential solution to improve the existing order fulfillment of PT. KTK. DMADV methodology from Six Sigma is used to gain a better understanding, measure the related metric, analyze the problem, providing a solution design, and implementing the solution in the existing warehouse process in PT.KTK. To align the operational strategy with PT. KTK business strategy, Porter’s Generic Strategy is used to gain and decide the best strategy for them. And the result, PT. KTK should focus on cost leadership by improving the effectiveness and efficiencies of their warehouse process enhance competitive advantages. Lastly, after the implementation is conducted and the result is observed, the solution can improve the order fulfillment of PT. KTK warehouse by 52.5%.


BUSINESS ISSUE EXPLORATION Conceptual Framework
Conceptual framework is synopsis of many things that has been found from reviewed literature sources, mapping out a research agenda to increase understanding of the research itself.It's also the result of multiple concepts related to the research brought together to explain and give a broader insight of things happening during the research.Conceptual frameworks represent the whole ideas and concepts from the findings, theories, and other type of guides for the research (Shikalepo, 2020).There are three categories of framework that are used in this research.The first is generic framework for exploration, these frameworks consist of SWOT analysis and Competitor Analysis.Each analysis is used to explore the external and internal condition of PT.KTK.External condition in PT.KTK is analyzed using competitor analysis to see PT. KTK among its competitors.The framework of this analysis is conducted using Myk Pono's classification.The next category of framework is Thematic for Exploration.This category of framework will be used to define the existing condition, analyze the problem, and formulate the solution to solve the problem that occurred in PT.KTK warehouse.The main framework used in this category is Six Sigma by using DMADV framework, a step-by-step method to solve problem that are occurred.The last category of the framework is a specific framework for solution.This framework will be the framework that will help to formulate a solution that will solve the problem that occurred in PT.KTK.There are two frameworks that are used in this category, the first is using Six Sigma to formulate the solution in the operational sides which related to effectiveness and efficiency of the process, and the second one is Porter's Generic Strategy to strengthen the operational solutions to be related to the business strategy of PT.KTK overall in terms of the cost reduction resulted from the operational solutions.

Place
Only able to sell products to the dealer, service center, and spare part shop Have 9 branch across East Java, sell directly to endcustomers using offline and online sales channel

People
Have a customer care service to ensure customer satisfaction level and immediately got feedback after purchasing spare parts or motorcycle have a customer service to provide feedback and complaints.Employee is understanding their products well.

Process
Have an automated system to ensure that the customers (spare part shop) will be supplied if the stock is low.
Provide a multi-channel platform (online and offline) to sell their products to a spare part shop or endcustomers Physical Evidence Have two head office for motorcycle unit and aftersales services Have 1 head office (warehouse) in Surabaya 7Ps Marketing Mix Marketing mix is variable that is controllable that are combined to produces a desirable expected response from the target market and today the variables that is commonly used are the 7Ps which are Product, Price, Promotion, Place, People Process, Physical Evidence (Kotler & Armstrong, 2022).To get a better understanding of the 7Ps of PT.KTK, this research will also compare the 7Ps of PT.KTK direct competitor which is PT.KSJY.This comparison is believed will give a better understanding on PT.KTK marketing mix compared directly to its direct competitors.The 7Ps marketing mix comparison between PT.KTK and PT.KSJY can be seen in Table 2.

SWOT Analysis
SWOT analysis is one of many a tool used for strategic planning and management in a company.It can be used to effectively analyze both internal and external factors.It's effectively used to formulate an organization strategy and competitive strategy.It's a crucial thing to analyze both internal and external environment to formulate an effective strategic planning (GÜREL, 2017).The SWOT analysis of PT.KTK can be seen in Table 3 Table 3 After analyzing the business situation in PT.KTK with all the external and internal condition, the next step would analyzing the operational situation that occurs in PT.KTK warehouse to gain a better understanding of PT.KTK as a whole company from its business and its operational condition.

Six Sigma
Six Sigma is a method or technique that is project-based with the purpose for improving effectiveness and efficiencies in a process.It's a disciplined, data-driven, and customer-oriented approach for improving performances of products, services, or processes and can be considered as a proactive and prevention-based rather than reactive and detection-based (Patel & Chudgar, 2020).

DMADV
DMADV (Define, Measure, Analyze, Design, Verify) is methodology for improving a system that used to develop a new process flow, products, or services.DMADV should be used in a couple of condition which are the product or process is not yet exist at a company and needs to be developed.The second is when the existing product or process exist and already been optimized but not yet achieved the Six Sigma level.The application of DMADV is used when a customer requires product adjustment, improvement, or a creation of an entirely new process, service, or product.This aimed to create a high-quality product or service that meets customer requirements (Selvi & Majumdar, 2014).

Define
The main purpose is to identify the existing condition and what's the potential problem in the process, product, or services.Identify purpose, identify, and set a measurable goal from both stakeholders and organization perspective, and to develop schedule and guidelines that will be reviewed, identified, and assessed (Pendokhare & Quazi, 2014).For PT.KTK, first that needs to be identified is the warehouse itself.Inside the warehouse of PT.KTK there are two categories of the spare parts warehouse which called WIS and AS/RS.WIS is a warehouse that functioned to store goods in the form of boxes for bulk orders.In fulfilling order of a smaller quantity goods, PT.KTK got a robotic warehouse that called Automatic Storage / Retrieval System (AS/RS) for this kind of order fulfillment.
Before incoming spare parts in stored and kept inside PT.KTK warehouse, the goods need to be received and need to be calculated regarding how much quantity to store in WIS and AS/RS.Before goods stored safely in either WIS or AS/RS, there are a lot of process need to be done before the goods stored in WIS and AS/RS.The process flowchart is shown in

Measure
In measure phase, all information gathered in define phase is evaluated and considered as the baseline status of the process and measure the existing condition based on the metric that is observed in the process (Venkatesh & Ravindranath, 2018).The first metric that needs to be observed and measured is the order fulfillment, whether the actual order fulfillment is on the ideal circumstances.The metric will calculate only the order fulfillment of AS/RS warehouse.The second metric that will be observed is the order fulfillment time, this metric is important to be observed because both of WIS and AS/RS is designed to fulfill different type of order, and if retail order is picked from WIS warehouse, it will consume a lot more time compared if the order is picked from AS/RS.

Figure 3. AS/RS Order Fulfillment Chart
Seeing from Figure 3, after a week observation, the chart shows that the AS/RS order fulfillment is far from the ideal condition.On average, the order fulfillment rate of AS/RS is only 55.3%.It means that almost half of the retail order still picked from WIS warehouse rather than AS/RS.This can be caused by the insufficient number of items stored in AS/RS warehouse, so the system will direct the order to be picked from WIS instead.Hence, the order fulfillment of AS/RS warehouse is still far from ideal considering almost 50% of retail orders still picked from WIS and this cause lacking efficiency and effectiveness in terms of order fulfillment in PT.KTK warehouse.
Seeing from Figure 2.12, it showed that there is deficit between the actual job completion time and the ideal time, this caused by the wrongly fulfilled order that resulted in longer job completion time.On average, the job completion time in PT.KTK warehouse is 65.1 hours.It means that on average, the warehouse needs more than two days to fulfill the order from the customers, meanwhile

Analyze
Analyze is the step from DMADV is a phase that focuses on how to create customer value and analyzing what's the root cause that causing the problem that happened (Baptista et atl, 2020) in this step will be analyzing why the existing process is ineffective and thus causing the order fulfillment is lacking effectiveness and efficiencies.This analyze process will be using Ishikawa Diagram as shown in Figure 5to analyze the root cause of the ineffective storing process in PT.KTK.

BUSINESS SOLUTION Operational Strategy Formulation
After deciding which is a better strategy for PT.KTK to pursue to increase their competitive advantages, the next step would be to formulate an operational strategy that is in line with the proposed business strategy to ensure the strategy will work for PT.KTK in increasing their competitive advantages on the market.The operational strategy formulation will be continuing the Six Sigma methods which is Design steps to design a new process of inventory storing and verify the result after conducting an implementation of the proposes process in PT.KTK warehouse.

Design
This phase is a crucial phase in designing and developing a new process in a business process as it collaborates all the constraints, assumption, and requirements of the finalize process (Chandan et al, 2022).In this process, the first is defining what's the input for the process of the inventory storing that will affect the new process of inventory storing process.Next is to define what will the process looks like in terms of calculating the quantity of incoming spare parts that will be stored in WIS and AS/RS.The last is the output of the process that will be a quantity of incoming spare parts that will be stored in WIS and AS/RS.The whole process can be seen in Figure 6.Which is the inventory storing process flow that integrated data between active PO, buffer stock, incoming spare parts, and inventory on-hand.This phase also raises the control of the implemented process that will guarantee its effectiveness and efficiencies (Baptista et at, 2020).There are two types of metrics that will be observed, measured, and compared which are AS/RS order fulfillment and Job Completion time.The observation after implementation is conducted between March 10 th , 2022, through March 16 th , 2022.For AS/RS order fulfillment metric will be compared with the before implementation of the AS/RS order fulfillment result.Meanwhile, the order fulfillment time will be compared to the ideal time.Based on the result in Figure 7, the percentage of AS/RS order fulfillment chart on average after 7-day observation is 83%.This means that 83% of the retail orders are picked from AS/RS compared to 55% AS/RS order fulfillment percentage before the proposed inventory storing model is implemented.It means that by implementing the proposed inventory storing model, it has improved the AS/RS order fulfillment chart by 52.5%. to get a better understanding or comparison between before and after implementation result of AS/RS order fulfillment, the chart in Figure 8 show the comparison between the percentage of AS/RS order fulfillment before and after implementation of the proposed inventory storing model. in comparison, the implemented inventory storing model has improved the inventory storing of PT.KTK spare parts warehouse.

Figure 8. AS/RS Order Fulfillment Comparison
Based on Figure 9, using the new inventory storing model, after a week of observation, the average job completion time is 47.3 hours.Compared to before new process implementation, the average job completion time after a week of observation is 65.1 hours.This means, using the proposed inventory storing model, the job completion time improved by 27.3%.If the after-implementation job completion time is compared to the ideal time, the gap is 7.8 hours, which improved if compared to the gap of job completion time and the ideal time before implementation which is 17.22 hours.After the implementation, the gap between job completion time and ideal time is reduced by 9.42 hours.If converted into a rupiah for a potential cost-saving after implementation of the inventory storing model, the average daily operational cost that is potentially will be saved is Rp5,152,126.75.Assuming the minimum hourly wage is Rp546,934.899[6], this potential cost saving after implementation of the proposed inventory storing model is align with the proposed business strategy that PT.KTK should be focusing its business to a cost leadership strategy to keep their competitive advantages.

Figure 2 .Figure 2 .
Figure 2. Inventory Storing Process Flowchart time for job completion is no more than two days.And compared to the ideal job completion time, on average if the order fulfilled ideally, the time of job completion will be 47.88 hours.It's just under two days of the desired target of job completion time.It means there are a 17.22 hours gap between the existing time and the ideal time.And if calculating that potential cost saving from enhance the order fulfillment by PT.KTK it can save on average up to 9 million rupiah per day.This calculated by multiply hourly minimum wage of Surabaya that currently sits at Rp4,375,479.19 (Gubernur Jawa Timur, 2021) (Disnaker, 2021) which resulted in Rp546,934.800hourly wage (assuming 8 hours work hours per day).This will have a massive impact for PT.KTK operational cost if PT. KTK can get near the ideal condition of order fulfillment.

Table 1 .
Group of Conceptual Framework

2581-8341 Volume 05 Issue 07 July 2022 DOI: 10.47191/ijcsrr/V5-i7-30, Impact Factor: 5.995 IJCSRR @ 2022 www.ijcsrr.org 2466
. SWOT Analysis of PT.KTK STRENGTHS 1. Main distributor of motorcycle unit in East Java and East Nusa Tenggara.2. Got the highest market share of brand A motorcycle in East Java and East Nusa Tenggara.OPPORTUNITIES 1.The emergence of big data application in warehousing process.2. Head start in application of robotic warehouse (AS/RS).3. Highly anticipated smart warehouse to enhance warehousing business process 4. Digitalization in many touch points og goods distribution supply chain.THREATS 1.The emergence of commercial-use electric motorcycle in Indonesia.2. The production, distribution, and selling of fake motorcycle spare parts.3. Increasing oil prices that affects the oil and tire production for motorcycle.
3. Got multiple motorcycle unit warehouse across East Java and East Nusa Tenggara.4. Advance spare part warehouse with Automated Storing / Retrieval System (AS/RS).3. Can't sell directly to end-user.4. Lack of data integration in spare parts business unit.ISSN: * Corresponding Author: Muhammad Kevin Leon Volume 05 Issue 07 July 2022 Available at: ijcsrr.orgPage No.-2462-2473 5.One of the biggest and modest brand A motorcycle showrooms in East Java and East Nusa Tenggara.